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May 2, 2013

LinkedIn Courts Advisors as Social Media Use Grows

Fully 63% of mass affluent consumers take action after using social media to learn about financial products and services, says LinkedIn study

LinkedIn headquarters in Mountain View, Calif. (Photo: AP)

LinkedIn is actively courting the financial advisor industry, now that the social network for work professionals is seeing double-digit growth in the advisor segment.

Nine out of 10 financial advisors interviewed last year were leveraging LinkedIn, and their use of the site was growing in double digits, said Jennifer Grazel, LinkedIn’s global head of category development for financial services.

“We have about 400,000 advisors on our platform,” said Grazel (right). “Of advisors we surveyed last year, 62% were getting new clients, and of those, 32% were seeing an incremental impact on their bottom line of over $1 million in new assets under management.”

One such advisor, Cathy Curtis of Curtis Financial Planning, a certified financial planner based in the San Francisco Bay Area, has been identified by LinkedIn as a “super user” because she is so active on the site. She also uses Facebook, Twitter, Google+, Pinterest and YouTube to boost her online profile.

“I think of marketing myself in terms of personal branding. I became really active online in 2008 after I rebranded my company and started to reach out more to women,” Curtis said. “All this activity online helps my Google profile. That’s the way things are going. It helps if someone in the Bay Area does a search and my name comes up high. Individuals want to connect with the person because if you advise someone about their money it’s a personal thing, so if you put your personal brand out there, you actively draw clients.”

Advisors, Investors Meet Online

At the same time that advisors are gravitating toward social media, investors also are using LinkedIn, Facebook, Twitter, Google+ and other social media to make financial decisions.

On Wednesday, LinkedIn and Cogent released a study revealing that 63% of mass affluent consumers take action after using social media to learn about financial products and services. The research concludes that close to 90% of people with investable assets between $100,000 and $1 million are active social media users. Of those, 44% engage with financial institutions in social media, with more than a third actively following companies, liking, commenting and sharing content.

“In the past few years, purchase behavior has transformed,” LinkedIn’s Grazel wrote in a blog post introducing the study, “Influencing the Mass Affluent.” “Buyers are not informed or persuaded by advertising alone and are using the web and social networks to educate themselves on potential purchases. This is especially true in the financial sector, creating a tremendous opportunity for financial institutions to reach mass affluent audiences by providing rich content to earn trust and credibility.”

Finance companies are increasingly turning to social media not only because regulators have recently freed them to do so, but because more than 5 million affluent investors use social media to make financial decisions, according to Grazel, who joined LinkedIn two and a half years ago after years of digital marketing experience at Prudential, GE Money and Citibank.

“Of these, 73% use LinkedIn – more than Facebook, Google+, and Twitter combined,” Grazel wrote in a February comment that touts LinkedIn as the preferred site for social networking among business professionals.

'It's a Big Opportunity for Advisors'

Created in 2002, Mountain View, Calif.-based LinkedIn was co-founded by Reid Hoffman and team members from PayPal and Socialnet.com. A total of 161 million professionals worldwide have connected with Linkedin, and every second that number grows by two more memberships as members look for jobs and read work-related content on the platform, according to a profile of the company on tech news site Mashable.

“The world's largest professional social network has made great leaps into the mobile space. In 2012, it launched an iPad app, in addition to updated iPhone and Android apps,” Mashable says. “In May, Linkedin bought slideshow presentation platform SlideShare for $119 million. Linkedin also acquired email startup Rapportive. The company is focused on new partnerships that will enable better professional connections and content for its global userbase.”

Why does this matter to financial advisors?

“There’s a big shift to how consumers are getting information,” Grazel said. “Social has to be integrated into business practices, and financial advisors are becoming aware that they need to incorporate social into their business practices. It’s a big opportunity for advisors to leverage social media, and more and more advisors with middleware and archiving are posting content to our platform. It’s a good way to keep in touch with clients.”

Curtis noted that she has seen LinkedIn growing its presence at advisor conferences as the networking site seeks more members. It makes sense, she said, considering that LinkedIn’s users have the highest net worth of any social media site.

“The conferences are starting to have separate areas for social media, and LinkedIn has computers there and a person individually helping advisors,” Curtis said. “I had a LinkedIn profile before Twitter and Facebook because it’s the more professional of the three.”

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